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Underlying Instruments
In finance, a derivative is a contract that ''derives'' its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying". Derivatives can be used for a number of purposes, including insuring against price movements ( hedging), increasing exposure to price movements for speculation, or getting access to otherwise hard-to-trade assets or markets. Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps. Most derivatives are traded over-the-counter (off-exchange) or on an exchange such as the Chicago Mercantile Exchange, while most insurance contracts have developed into a separate industry. In the United States, after the financial crisis of 2007–2009, there has been increased pressure to move derivatives to trade on exchanges. Derivatives are one o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Finance
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of financial economics bridges the two). Finance activities take place in financial systems at various scopes, thus the field can be roughly divided into personal, corporate, and public finance. In a financial system, assets are bought, sold, or traded as financial instruments, such as currencies, loans, bonds, shares, stocks, options, futures, etc. Assets can also be banked, invested, and insured to maximize value and minimize loss. In practice, risks are always present in any financial action and entities. A broad range of subfields within finance exist due to its wide scope. Asset, money, risk and investment management aim to maximize value and minimize volatility. Financial analysis is viability, stability, and profitability asse ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chicago Mercantile Exchange
The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an agricultural commodities exchange. Originally, the exchange was a non-profit organization. The Merc demutualized in November 2000, went public in December 2002, and merged with the Chicago Board of Trade in July 2007 to become a designated contract market of the CME Group Inc., which operates both markets. The chairman and chief executive officer of CME Group is Terrence A. Duffy, Bryan Durkin is president. On August 18, 2008, shareholders approved a merger with the New York Mercantile Exchange (NYMEX) and COMEX. CME, CBOT, NYMEX, and COMEX are now markets owned by CME Group. After the merger, the value of the CME quadrupled in a two-year span, with a market cap of over $25 billion. Today, CME is the largest options and futures con ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Notional Amount
The notional amount (or notional principal amount or notional value) on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument. This amount generally does not change and is thus referred to as ''notional.'' Explanation Contrast a bond with an interest rate swap: * In a bond, the buyer pays the principal amount at issue (start), then receives coupons (computed off this principal) over the life of the bond, then receives the principal back at maturity (end). * In a swap, no principal changes hands at inception (start) or expiry (end), and in the meantime, interest payments are computed based on a notional amount, which acts ''as if'' it were the principal amount of a bond, hence the term ''notional principal amount'', abbreviated to ''notional''. In simple terms, the notional principal amount is essentially how much of an asset or bonds a person owns. For example, if a premium bond were bought for £1, then the notional princip ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Commodity Exchange Act
Commodity Exchange Act (ch. 545, , enacted June 15, 1936) is a federal act enacted in 1936 by the U.S. Government, with some of its provisions amending the Grain Futures Act of 1922. The Act provides federal regulation of all commodities and futures trading activities and requires all futures and commodity options to be traded on organized exchanges. In 1974, the Commodity Futures Trading Commission (CFTC) was created as a result of the Commodity Exchange Act, and in 1982 the National Futures Association (NFA) was created by CFTC. See also *Grain Futures Act *National Futures Association *Commodity Futures Trading Commission *Futures exchange *Futures contract *Commodity Futures Modernization Act of 2000 The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that ensured financial products known as over-the-counter (OTC) derivatives remained unregulated. It was signed into law on December 21, 2000 by President ... External links 7 U.S. Code ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bucket Shop (stock Market)
A bucket shop is a business that allows gambling based on the prices of stocks or commodities. A 1906 U.S. Supreme Court ruling defined a ''bucket shop'' as "an establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in". A person who engages in the practice is referred to as a bucketeer and the practice is sometimes referred to as bucketeering. Bucket shops were found in many large American cities from the mid-1800s but the practice was eventually ruled illegal and largely disappeared by the 1920s. Overview Definition and term origin According to ''The New York Times'' in 1958, a bucket shop is "an office with facilities for making bets in the form of orders or options based on current exchange prices of s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Thales
Thales of Miletus ( ; grc-gre, Θαλῆς; ) was a Greek mathematician, astronomer, statesman, and pre-Socratic philosopher from Miletus in Ionia, Asia Minor. He was one of the Seven Sages of Greece. Many, most notably Aristotle, regarded him as the first philosopher in the Greek tradition, and he is otherwise historically recognized as the first individual known to have entertained and engaged in scientific philosophy.Frank N. Magill''The Ancient World: Dictionary of World Biography'', Volume 1 Routledge, 2003 He is often referred to as the Father of Science. Thales is recognized for breaking from the use of mythology to explain the world and the universe, instead explaining natural objects and phenomena by offering naturalistic theories and hypotheses. Almost all the other pre-Socratic philosophers followed him in explaining nature as deriving from a unity of everything based on the existence of a single ultimate substance instead of using mythological explanations. A ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Olive
The olive, botanical name ''Olea europaea'', meaning 'European olive' in Latin, is a species of small tree or shrub in the family Oleaceae, found traditionally in the Mediterranean Basin. When in shrub form, it is known as ''Olea europaea'' 'Montra', dwarf olive, or little olive. The species is cultivated in all the countries of the Mediterranean, as well as in Australia, New Zealand, North and South America and South Africa. ''Olea europaea'' is the type species for the genus ''Olea''. The olive's fruit, also called an "olive", is of major agricultural importance in the Mediterranean region as the source of olive oil; it is one of the core ingredients in Mediterranean cuisine. The tree and its fruit give their name to the plant family, which also includes species such as lilac, jasmine, forsythia, and the true ash tree. Thousands of cultivars of the olive tree are known. Olive cultivars may be used primarily for oil, eating, or both. Olives cultivated for consumption ar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Aristotle
Aristotle (; grc-gre, Ἀριστοτέλης ''Aristotélēs'', ; 384–322 BC) was a Greek philosopher and polymath during the Classical period in Ancient Greece. Taught by Plato, he was the founder of the Peripatetic school of philosophy within the Lyceum and the wider Aristotelian tradition. His writings cover many subjects including physics, biology, zoology, metaphysics, logic, ethics, aesthetics, poetry, theatre, music, rhetoric, psychology, linguistics, economics, politics, meteorology, geology, and government. Aristotle provided a complex synthesis of the various philosophies existing prior to him. It was above all from his teachings that the West inherited its intellectual lexicon, as well as problems and methods of inquiry. As a result, his philosophy has exerted a unique influence on almost every form of knowledge in the West and it continues to be a subject of contemporary philosophical discussion. Little is known about his life. Aristotle was born in th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mortgages
A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is " secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property ("foreclosure" or " repossession") to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word ''mortgage'' is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. A mortgage can also be described as "a borrower giving consideration in the form ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bond (finance)
In finance, a bond is a type of security under which the issuer ( debtor) owes the holder ( creditor) a debt, and is obliged – depending on the terms – to repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure. Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in a company (i.e. they are owners), whereas bondholders have a creditor stake in a company (i.e. they are lenders). As creditors, bondholders have priority over stockholders. This means they will be repaid in advance of stockholders, but will rank behind s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt
Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The debt may be owed by sovereign state or country, local government, company, or an individual. Commercial debt is generally subject to contractual terms regarding the amount and timing of repayments of principal and interest. Loans, bonds, notes, and mortgages are all types of debt. In financial accounting, debt is a type of financial transaction, as distinct from equity. The term can also be used metaphorically to cover moral obligations and other interactions not based on a monetary value. For example, in Western cultures, a person who has been helped by a second person is sometimes said to owe a "debt of gratitude" to the second person. Etymology The English term "debt" was first used in the late 13th century. The term "debt" comes ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Equity (finance)
In finance, equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets. For example, if someone owns a car worth $24,000 and owes $10,000 on the loan used to buy the car, the difference of $14,000 is equity. Equity can apply to a single asset, such as a car or house, or to an entire business. A business that needs to start up or expand its operations can sell its equity in order to raise cash that does not have to be repaid on a set schedule. In government finance or other non-profit settings, equity is known as "net position" or "net assets". Origins The term "equity" describes this type of ownership in English because it was regulated through the system of equity law that developed in England during the Late Middle Ages to meet the growing demands of commercial activity. While the older common law courts dealt with questions of property title, equi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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